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Good morning.
I'm John Tucker and I'm Karen Moscow. Here are the stories we're following today.
Karen, we begin overseas where traders are following the political landscape in France. City Group strategists downgraded the region to neutral from overweight, citing risks of extreme parties gaining ground in the upcoming parliamentary elections, and Bloomberg's Ewan Pots joins us for the latest on what's happening in Europe. You and good morning, John and Karen.
European stocks fairly flat this morning after in Vester's flocked to haven assets at the end of last week. Political volatility in France very much in focus, with latest polls putting President at Manual Macron's party in third place out of upcoming elections to the French Parliament. The party of far right leader Marine Le penn currently has a polling lead,
with a left wing coalition in second place. They presented plans to pick apart most of Macron's seven years of economic reforms and set France on a collision course with the European Union over fiscal policy. The first round of voting takes place in just under two weeks time. In London, immune potsplinback radio all.
Right you and Thanks, and the political upheaval in France has led Paris to lose its title as Europe's largest equity market. Billions of dollars are wiped off the market cap of French firms after Emmanuel mccron called the surprise snap election. Stocks in the country are now collectively worth about three point one three trillion dollars, narrowly behind London's three point one eight trillion. The CATC forty index has erased all its gains for twenty twenty four.
And meanwhile, in the UK, Richie Sunac's Conservatives headed for a wipeout in the July fourth general election. At least that's according to new polling data. Servation survey sees the Tories getting only seventy two seats, which would be their worst election performance in two centuries. One of the reasons for their slide in the polls has been the emergence of the right wing Reform UK led by Nigel Farage, the party launching its manifesto today well John.
As the political turmoil continues in Europe, new data show the US mopped up almost one third of all the global investment flows since COVID analysis by the International Monetary Fund shows that the US's share of financial flows has climbed with higher interest rates of major draw for overseas investors. The pre pandemic US average share was just eighteen percent. The US also pulled in a fresh wave of foreign
direct investment. However, FED rate policy and the presidential election could affect the fiscal deficit.
And Karen the Markets Now Trader is going to be digesting a lot of FED speak this week following last week's CPI reading and FED decision. We're going to hear from the New York FED President John Williams today as well as Patrick Carker or Philadelphia and fedkevinor Lisa Cook. Later this week, we'll hear from the Dallas FED President
Lorie Logan and the Chicago FED President Austin Goolsby. Over the weekend, Minneapolis FED President Neil kesh Carey said on CBS has faced the nation that rate cuts are still a ways away.
We're in a very good position right now to take our time, get more inflation data, get more data on the economy, on the labor market, before we have to make any decisions. So we're in a strong position. But if you just said there's going to be one cut, which is what the mediaan indicated that would likely be toward the end of the year.
Well John.
Minneapolis FED President Neil Kashgari's comments are echoed by Cleveland FED President Loreddamester, who spoke with our Michael McKee. Mester says monetary policy is well positioned to ensure that inflation moves back down to two percent over time.
It's going to take some time to get inflation back to two percent all the way back. So my projection is that we probably won't get there until twenty twenty six, but we'll see progress continue in my modal view, and that's enough right to then say, okay, it's time to start the process of bringing rates down.
Cleveland FED president the REDDA Master says the central bank is in a comfortable position to address inflation if data comes in hotter than expected, or to address any potential disinflationary trends that emerge.
And moving to politics now, with the November presidential election approaching, the ranks of double hater voters have hit an all time high. This according to new analysis from Pew Research, double haters make up one quarter of the electorate. That's nearly twice as many as at this point in twenty twenty. Double haters are disaffected voters who say they don't like
either major party presidential candidate. Biden and Trump are taking roughly equal measures of these voters in battleground states, with a May Bloomberg News Morning Console pull showing President Biden winning twenty five percent to Trump's twenty two percent.
Well John, As Donald Trump looks to return to the White House, he's proposing a new idea of using tariff hikes as a way to pay for some income tax cuts. Former Treasury Secretary Larry Summers blasted Trump's plan, saying it'd be damn imaging to both the US and the global economy. Summers tells Bloomberg that Trump's plan to use tariffs in his way is a quote prescription for the mother of all stagflations.
Look, I don't think there's been a more inflationary.
Presidential economic policy platform in my lifetime.
And asked about Larry Summer's criticisms, a Trump campaign spokesperson said, quote, Americans can expect President Trump's second term economic agenda will end at Joe Biden's inflation crisis that continues to rob working families of thousands of dollars every month.
Oils slipped following mixed economic data out of China, and the pullback and oil came as the Biden administration reportedly is ready to reopen the US stockpile. Prices jump in the summer months ahead. Amos Hawkstain, the President Biden's closest advisor on energy, telling the Financial Times the administration will do everything it can to make sure the market is supplied well enough to ensure low prices as low prices as possible for American consumers, which includes releasing more oil
from these strategic petroleum reserves. He says he believes there's enough oil in the stockpile if it becomes necessary to draw from the reserves.
Well elsewhere on the energy front, here, John Bill Gates said he's prepared to throw billions of dollars into a next generation nuclear power plant project in Wyoming to make growing US electricity needs. The billionaire tell Cbs has faced the nation that his energy startup, Terra Power, relies on sodium cooling rather than water, which is believed to both simplify the process while also being safer, and can make nuclear energy a source of a low cost electricity in.
Two big backers of this project are the terr power vesters, of which I'm the largest. I put in over a billion and I'll put in billions more. And then the federal government, who is helping because of the strategic benefits of having energy security and so we're not asking any of the utility customers to take any risk and have to pay high electricity prices. All of that risk is on terror Power and the US.
Government Bill gates as Terror Powers plant is on track to start producing power by twenty thirty.
And here it comes the season's first heat wave set to hit the East Coast this week. Excessive heat watches have been posted from Michigan to New Hampshire. Manhattan is set to reach ninety one degrees tomorrow as steadily get hotter throughout the week. Electric rids and wholesale prices will be stressed as demand rises with the temperatures, which could slow trains, tie it freight and passenger traffic, and can also lead to increased heat illnesses.
And it's time now for a look at some of the other stories making news in New York and around the world. For that, we're joined by The Blottleberg's Michael Barr Michael good Morning, Good.
Morning care In. The israelilitary says it is pausing fighting during daytime hours along a route in southern Gaza to free up a backlog of humanitarian aid deliveries for desperate Palestinians. It should allow eight trucks to reach the Israel controlled Karam Shalom crossing and travels safely to a highway to deliver supplies to other parts of Gaza. The United Nations says it welcomes the move, but adds that so far
no aid has left Karam Shalom. A peace conference to end the warn Ukraine wrapped up Sunday, with eighty countries jointly calling for any peace agreement between Russia and Ukraine. EU Commission President Ursulavderlane says peace won't be achieved in a single step.
I call on Russia to heed the message of the international community, respect the territorial integrity and sovereignty of Ukraine, put an end to imperialist violence, and bring back the children.
Russia was not invited to the conference in Switzerland. Several mass shootings took place in the US over the weekend. In the Detroit suburb of Rochester Hills, Michigan, a vigil took place for nine people who were wounded at a splash pad. The victims including two children and a pregnant woman. Rochester Hills Mayor Brian Barnett spoke at the vigil.
Thank you for being for caring enough to be here today, and if there's anything that the city can do, we.
Stand ready to do it.
We're stunned and hurt as well, but we know that we have a role to play and we want to do.
It as best we can.
The gunman was found dead in his home from an apparent self inflicted gunshot wound. In Texas, two people were killed and several others injured during a June teenth celebration over the weekend. In round Rock, police a shots were fired during a fight near a concert stage. And in Methuen, Massachusetts, officials say seven people were shot after a pop up
party organized over social media erupted in gunfire. A week and a half before the first presidential debate, Former President Donald Trump meets today with the House Speaker Mike Johnson at Trump's resort in Mara Lago. Congressional Republicans are looking at how to hold on to the slim majority they have in the House. The Outsiders, based on the novel of the same name by Susan Elouise Hinton, won the Tony Award for Best Musical Producer. Matthew Rigo thanked the author for sharing your story.
Susie.
I'm here to tell you that your story and his eternal message of love and family and stain gold has forever changed all of our lives.
We love you, Thank you.
I Stereophoni took home Best Play and Appropriate Best Play Revival Global News twenty four hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr. This is Bloomberg Karen.
Yes, stay gold. Michael Barr, thank you time now for the Bloomberg Spores Update with John Stanishauer. John, good morning, Good morning care.
In the one hundred and twenty fourth US Open came down the price of the Shambo and Rory McElroy down the stretch at times tied both hell leads on the back nine mcelroyal, but Theeah today three shots behind, led by two with five holes to play and then had a nightmare finish three Vogue. He's on sixteen and eighteen. He missed a par put of no more than four feet to Shamba took advantage a tremendous save for par on the last hole gave him the one shot victory
the second Open title. On eighteen, his t shot landed near a tree, his second shot in a bunker well away from the green, but his sands shot got him within four feet of the hole.
Thousands USGA Championship.
I mean, just stack him on top.
That bunker shot was the shot of my life.
And I'll forever be thankful that I've got longer wedges.
Shambo referenced to total number of USGA events that have been played. Heartbreak for Mcelroyalo's guy gone a decade without winning a major. Eleven times since then he's finished in the top five. This was his fourth second place finish. Yankees quick starting Boston Aaron Judge home run of the first in his twenty sixth with the Red Sox won
nine to three and won the series. Boston pulled away after the Yanks down four to three in the seventh, had the bases loaded, no one out and didn't score Mets with a city field sweep of the Padres, winning eleven to six. Mets have won five in a row nine of the last eleven. Rough weekend for the Dodgers. They lost Yoshinovo Yamamoto to a strained rotator cuff, and then Mookie Betts got hit with a pitch broke his hand. They did win yesterday at show O Tony Homer twice.
Celtics tonight with a second chance to win the NBA Championship, this time at home. They lead Dallas three games to one. Another Caitlin Clark incident in the WNBA game against the Chicago Sky. This time it was fellow rookie Angel Reese who hit Clark in the head. Fever won the game. Clark scored twenty three points, had eight rebounds nine assists. John Stash, I want Bloomberg Sports Karen.
Coast to Coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg dot Com and the Bloomberg Business app. This is Bloomberg Daybreak at.
US Futures right now indicate a mixto open on Wall Street this morning. No short of events for investors to launch onto us. We start the new week from the Bloomberg Interactive Brokers studios. I'm John Tucker along with Karen Moscow. We have the escalating concern about political volatility in France. We had fed to speak over the weekend. Neil kush Karri is saying, the central Bank and tickets time before cutting rates. Let's get you set up for the trading
day ahead. We're joined now by Bloomberg's Critty Gupta, host of Markets today in the UK. Pleasure to talk to you, Againtty. Politics do matter for markets. In fact, France's stock market now falling behind the UK. Do I have that right?
And that you do?
And this is remember something that they kind of overtook about two years ago, and this latest drop behind the UK's market cap is coming off of, of course, the electoral volatility that you were talking about, about five percent correction that you saw in the stock market. We'll call that a mini correction, if you will. For the equities
they're seeing a little bit of a rebound today. But what you need to know over the weekend is not only is there this risk from the far right to Emmanuel mcran, a revamped perhaps of what we saw in
twenty seventeen from Marine la Penn. Now he's dealing with it from the left to and this is significant when we're talking about policies that impact the markets, because this is a group that is not only now that he has to contend with for the snap legislative elections, but wants to reverse government pension reform, reinciate the right to retire at just sixty and this is a really big deal.
A lot of French are very passionate about. It has led to a lot of protests on the streets, big trash bags, for example, across Paris as a sign of protests for a lot of the people include a lot of people who were protesting Emmanuel mccron increasing the potential retirement age to sixty three even sixty four in a way to kind of control the country's finances. Marine la Penn on the far right on the other hand, then
talking about perhaps unleashing the spending caps. These are the concerns that the markets are worried about when it comes to what policies might be shaping France in the next couple weeks.
Let's move on to the US. Oh, we've got the FED and we've gotten the more hawkish despite some of the data that we've seen. Give us an idea of what's on this front, because it's a very delicate balancing act for the Federal Reserve. At this point. You don't want inflation to rise or rise any further. At the same time, you don't want to trash the economy.
You definitely don't. And I think this is where you put your J. Powell Powell thinking cap and say, look, you're data dependent, right, And I hate to use that word because it's so frustrating, But here's really where you need to keep in mind is what the data told us. Last week, you had CPI data that was prepped welcomed by the Fed, PPI numbers that were again welcomed by
the Fed, showing that that disinflationary path is continuing. But then on Friday, those consumer sentiment numbers hitting a seven month low and really crashing even two thousand nine lows in certain parts of the market. Now this is concerning because if the economic data is showing that inflation is coming down, and you have job growth that is still picking up in still growing, why is consumer sentiment so low and how does that affects spending? Ability, especially ahead
of the election. That really changed a little bit of the market pricing. Whereas the Fed said, look, there could be one cup this year, maybe even two, the marketers are saying, well, actually, this could be more and more of a twenty twenty five problem. And remember, the Fed is going to likely be on the sidelines as we get closer to the election. At least that's the assumption from Global Wall Street.
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